ReNew Power raises $265 mn from new, existing investors
PE firms are increasing interest in India’s green energy assets; experts expect more deals, as cost of renewables falls
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New Delhi: Green energy producer ReNew Power Ventures Pvt. Ltd on Tuesday said it has raised $265 million in fresh equity from investors, including Abu Dhabi Investment Authority (ADIA).
While an ADIA subsidiary has decided to invest $200 million, ReNew Power’s largest investor, Goldman Sachs Group Inc., made additional commitment of $50 million in the fourth round of funding, taking its total investment to $370 million. Also, Global Environment Fund, another existing investor, will add $15 million, taking its total investment to $35 million.
“With this new round of funding, ReNew Power has raised a total equity of $655 million. The company currently has an asset base in excess of $1.5 billion and expects to finish the year with an asset base of over $2 billion,” said the company in a statement without disclosing the stakes held by investors in the firm.
Mint had on 29 May reported about ReNew Power’s plans to raise around $150-200 million.
Private equity (PE) firms have shown increasing interest in India’s green energy assets and experts expect more deals in the space, as the cost of renewable energy falls.
Solar and wind energy are nearing grid parity—the point at which they will cost the same as power produced from traditional sources and become available on the nation’s transmission and distribution grid. A case in point being infrastructure investment manager I-Squared Capital, which through its ISQ Global Infrastructure Fund in August, announced its investment in Amplus Energy Solutions.
Also, a subsidiary of Singapore-based Sembcorp Industries Ltd acquired 60% stake in IDFC Alternatives-backed renewable energy firm Green Infra Ltd for S$227 million in February. In the same month, Actis Capital committed $230 million to create an Indian renewable energy platform—Ostro Energy Pvt. Ltd.
In 2012, Morgan Stanley Infrastructure Partners invested $212.03 million in wind power firm Continuum Wind Energy Pte Ltd.
The government has set a target of generating 100,000MW of solar power and 60,000MW of wind power by 2022 in a country that’s the world’s third largest emitter of greenhouse gases, behind only the US and China.
This comes in the backdrop of CLP India, one of the largest foreign investors in the Indian power sector, raising concerns about the sustainability of electricity tariffs being quoted by solar power developers.
In July 2014, ReNew Power raised $140 million from three investors—Asian Development Bank (ADB), South Asia Clean Energy Fund India and Goldman Sachs. Prior to that, in September 2011, ReNew Power raised Rs.1,000 crore from Goldman Sachs, which was the largest investment in India’s renewable energy sector at the time.
Currently, ReNew Power has a portfolio of 1,600MW operational and under-construction green energy projects.
In India, renewable energy currently accounts for only 13%, or 35,777MW of total installed power capacity of 2,76,089 MW.
Sumant Sinha, founder chairman and chief executive officer at ReNew Power, in a statement, said: “We are at an inflection point where the transformational use of natural resources will define our energy future. This fundraise comes at an exciting time for us as we enter a new phase of growth.The years ahead will define ReNew Power’s role in transforming how energy is produced, transmitted and distributed in this country.”
The emphasis on solar and wind power is also expected to strengthen India’s standing at global climate change negotiations that culminate in a summit in Paris in December.
In India, which is the biggest greenhouse gas emitter after the US and China, renewable energy currently accounts for 13%, or 35,777 MW, of the total installed capacity of 2,74,818 MW.
“India wants to position itself as a key global solar market as against being seen as just another emerging solar market,” said Bridge to India, a solar energy consulting firm said in a statement on Monday.
“Going forward, India needs to build expertise in low cost manufacturing, grid-integration of renewables and smart grid management.”
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